FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended December 31, 1999.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-17554
FRP PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
Florida 59-2924957
(State or other jurisdiction of (I.R.S. Employer)
incorporation or organization) Identification No.)
155 East 21st Street, Jacksonville, Florida 32206
(Address of principal executive offices)
(Zip Code)
904/355-1781
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of February 1, 2000: 3,338,158 shares of $.10 par value
common stock.
<PAGE>
FRP PROPERTIES, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
(In thousands)
(Unaudited)
December 31, September 30,
1999 1999
ASSETS
Current assets:
Cash and cash equivalents $ 3,139 $ 2,593
Accounts receivable:
Affiliates 293 399
Other 9,569 8,336
Less allowance for doubtful accounts (287) (284)
Inventory of parts and supplies 615 503
Prepaid expenses and other 2,723 2,614
Total current assets 16,052 14,161
Other assets:
Real estate held for investment, at cost 5,674 5,674
Goodwill 1,197 1,207
Other 2,378 2,244
Total other assets 9,249 9,125
Property, plant and equipment, at cost 178,247 172,747
Less accumulated depreciation and
depletion (58,776) (57,378)
Net property, plant and equipment 119,471 115,369
$144,772 $138,655
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term note payable to bank $ 5,500 $ 3,000
Accounts payable:
Affiliates 330 166
Other 3,489 5,399
Federal and state income taxes 803 499
Accrued liabilities 3,763 3,866
Long-term debt due within one year 742 625
Total current liabilities 14,627 13,555
Long-term debt 42,673 37,936
Deferred income taxes 8,820 8,820
Accrued insurance reserves 4,060 4,644
Other liabilities 1,619 1,008
Stockholders' equity:
Preferred stock, no par value;
5,000,000 shares authorized - -
Common stock, $.10 par value;
25,000,000 shares authorized,
3,363,917 shares issued
(3,375,817 at September 30, 1999) 336 338
Capital in excess of par value 15,392 15,660
Retained earnings 57,245 56,694
Total stockholders' equity 72,973 72,692
$144,772 $138,655
See accompanying notes.
<PAGE>
FRP PROPERTIES, INC.
CONSOLIDATED CONDENSED STATEMENT OF INCOME
(In thousands except per share amounts)
(Unaudited)
THREE MONTHS
ENDED DECEMBER 31,
1999 1998
Revenues:
Affiliates $ 1,616 1,767
Non-affiliates 18,534 17,264
20,150 19,031
Cost of operations 16,543 14,638
Gross profit 3,607 4,393
Selling, general and
administrative expense:
Affiliates 207 420
Non-affiliates 1,755 1,674
1,962 2,094
Operating profit 1,645 2,299
Interest expense (745) (559)
Interest income 2 3
Income before income taxes 902 1,743
Provision for income taxes 352 680
Net income $ 550 $1,063
Basic earnings per
common share $ .16 .31
Diluted earnings per
common share $ .16 .30
Cash dividends NONE NONE
Number of shares used in computing:
Basic earnings per share 3,366 3,464
Diluted earnings per share 3,387 3,490
See accompanying notes.
FRP PROPERTIES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
THREE MONTHS ENDED DECEMBER 31, 1999 AND 1998
(In thousands)
(Unaudited)
1999 1998
Cash flows from operating activities:
Net income $ 550 1,063
Adjustments to reconcile net income to net cash
provided from operating activities:
Depreciation, depletion and amortization 2,642 2,336
Net changes in operating assets and liabilities:
Accounts receivable (1,126) (52)
Inventory of parts and supplies (112) 12
Prepaid expenses (110) 49
Accounts payable and accrued liabilities (644) (400)
Net change in insurance reserve and other
liabilities 26 22
(Gain) loss on disposition of real estate, plant
and equipment (252) (186)
Other, net 14 9
Net cash provided from operating activities 988 2,853
Cash flows from investing activities:
Purchase of property, plant and equipment (6,781) (4,280)
Additions to other assets (183) (26)
Proceeds from sale of real estate held for investment,
property, plant and equipment, and other assets 338 268
Net cash used in investing activities (6,626) (4,038)
Cash flows from financing activities:
Proceeds from long-term debt 5,000 -
Net increase in short-term debt 1,600 6,300
Repayment of debt (147) (5,127)
Repurchase of Company stock (269) (99)
Net cash provided from financing activities 6,184 1,074
Net increase (decrease) in cash and cash equivalents 546 (111)
Cash and cash equivalents at beginning of year 2,593 367
Cash and cash equivalents at end of the period $3,139 256
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest expense, net of amount capitalized $ 722 575
Income taxes $ 131 784
Non cash investing activities:
Additions to property, plant and equipment from exchanges $ 6 89
See accompanying notes.
FRP PROPERTIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 1999
(Unaudited)
(1) Basis of Presentation. The accompanying consolidated
condensed financial statements include the accounts of the
Company and its subsidiaries. These statements have been
prepared in accordance with generally accepted accounting
principles for interim financial information and the instructions
to Form 10-Q and do not include all the information and footnotes
required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation of the results for the interim
periods have been included. Operating results for the three
months ended December 31, 1999, are not necessarily indicative of
the results that may be expected for the fiscal year ended
September 30, 2000. The accompanying consolidated financial
statements and the information included under the heading
"Management's Discussion and Analysis" should be read in
conjunction with the consolidated financial statements and
related notes of FRP Properties, Inc. for the year ended
September 30, 1999.
(2) Industry Segments. The Company has identified two business
segments each of which is managed separately along product lines.
All the company's operations are in the Southeastern and mid-Atlantic states.
The transportation segment hauls liquid and dry commodities by
motor carrier. The real estate segment owns real estate of
which a substantial portion is under mining royalty agreements or
leased. They also hold certain other real estate for investment
and are developing commercial and industrial properties.
Operating results and certain other financial data for the
Company's business segments are as follows (in thousands):
1999 1998
Revenues:
Transportation $ 17,523 16,445
Real estate 2,627 2,586
$ 20,150 19,031
Operating profit (a)
Transportation $ 561 1,426
Real estate 1,455 1,518
Corporate expenses (371) (645)
Operating profit $ 1,645 2,299
Identifiable assets, at
quarter end
Transportation 53,735 45,108
Real estate 89,411 79,558
Cash items 1,117 552
Unallocated corporate assets 509 507
$144,772 125,725
(a) Operating profit is earnings before interest expense,
other income, interest income and income taxes.
(3) Spin-off of Real Estate Business. On December 1, 1999, the
Board of Directors approved a reorganization of the Company which
would result in spinning off to its shareholders a new company
which would include the real estate business, while retaining the
transportation business in FRP Properties, Inc. The Company has
obtained a tax ruling from the Internal Revenue Service which
allows the proposed transaction to be tax-free to shareholders.
It is anticipated that the spin-off will be made effective by the
end of the calendar year. For information concerning the
selected information concerning the real estate business, see
Note 2.
(4) Name Change Approval. At the annual meeting on February 2,
2000, the shareholders approved a proposal to amend Article I of
the Company's Articles of Incorporation to change the name of the
Company to Patriot Transportation Holdings, Inc. The name
change will be effective upon filing of the amended Articles of
Incorporation with the State of Florida.
(5) Contingent Liabilities. The Company and its subsidiaries
are subject to legal proceedings and claims arising out of their
businesses that cover a wide range of matters. Additional
information concerning these matters is presented in Note 11 to
the consolidated financial statements included in the Company's
1999 Annual Report to stockholders. Such information is
incorporated herein by reference.
MANAGEMENT'S DISCUSSION AND ANALYSIS
Operating Results
For the first quarter of fiscal 2000, ended December 31, 1999, consolidated
revenues increased 5.9% over the same period last year. The Transportation
segment revenues for the first quarter increased 6.6% due primarily to 4.8%
increase in miles hauled and a modest increase in pricing over the same
quarter last year. Real estate revenues increased 1.6% for the first
quarter. The real estate revenue increase was due to increased rental
income on developed properties. The Company did not have any timber sales
during the first quarter of fiscal 2000; however, real estate revenues last
year included $69,000 of timber sales.
Consolidated gross profit decreased $786,000 or 17.9% as compared to last
year. Gross profit in Transportation decreased $703,000 for the first
quarter. The decrease in gross profit for the Transportation Group was
primarily attributed to a tight labor market for drivers resulting in
increased costs to hire and retain personnel as well as rising fuel costs
and higher depreciation expense resulting from an expanded and upgraded
tractor fleet.
Gross profit in the Real Estate segment decreased $82,000 for the first
quarter. Real estate gross profit was negatively impacted by lower
royalty receipts and the absence of timber sales on a comparative basis.
Selling, general and administrative expense decreased $132,000 for the
first quarter from the same period last year. Selling, general and
administrative expense as a percent of sales was 9.7% for the first quarter
as compared to 11.0% last year. The decrease was primarily attributable to
severance compensation accrued during the first quarter of last year
partially offset by increased administrative expenses related to formation
of an owner/operator subsidiary.
Interest expense increased $186,000 for the first quarter, due primarily to
an increase in the average debt outstanding and an increase in average
interest rate.
Tight labor conditions combined with rising fuel costs and the likelihood
of higher interest rates will increase costs for this year. Start up
costs related to owner/operator subsidiary will adversely affect operating
profits in the short-term.
Year 2000 Conversion. The Company completed its program to be Year 2000
compliant and encountered no significant problems.
Financial Condition
The Company continues to maintain its sound financial condition with
sufficient resources to meet anticipated capital expenditures and other
operating requirements. The Company's revolving credit facility will
convert to a term loan if not modified by the end of the Company's third
quarter. The Company is currently in process of evaluating and discussing
its long-term credit needs with its bank group and anticipates it will
complete the extension and/or modification of its credit facility during
the third fiscal quarter.
Other
During fiscal 1999, the transportation segment's ten largest customers
accounted for approximately 33% of transportation's revenue. The loss of
any one of these customers could have an adverse effect on the Company's
revenue and income.
While the Company is affected by environmental regulations, such
regulations are not expected to have a major effect on the Company's
capital expenditures or operating results. Additional information
concerning environmental matters is presented in Note 11 to the
consolidated financial statements included in the Company's 1999 Annual
Report to stockholders. Such information is incorporated herein by
reference.
Forward-Looking Statements. Certain matters discussed in this report
contain forward-looking statements that are subject to risks and
uncertainties that could cause actual results to differ materially from
those indicated by such forward-looking statements. These forward-looking
statements relate to, among other things, capital expenditures, liquidity,
capital resources, competition and may be indicated by words or phrases
such as "anticipate," "estimate," "plans," "projects," "continuing,"
"ongoing," "expects," "management believes," "the Company believes," "the
Company intends" and similar words or phrases. The following factors are
among the principal factors that could cause actual results to differ
materially from the forward-looking statements: availability and terms of
financing; competition; levels of construction activity in the FRI's
markets; labor market for drivers; fuel costs; and inflation.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
Note 11 to the consolidated financial statements included in the Company's
1999 Annual Report to stockholders is incorporated herein by reference.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. The response to this item is submitted as a separate
Section entitled "Exhibit Index", starting on page 10.
(b) Reports on Form 8-K. During the three months ended December 31,
1999, the Company filed a Form 8-K dated November 8, 1999
reporting that FRP Properties obtained planned unit development
rezoning of a parcel of land located on the Anacostia River in
the District of Columbia under Item 5, "Other Events" and Item 7,
"Financial Statements, Pro Forma Financial Statements and
Exhibits."
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
February 11, 2000 FRP PROPERTIES, INC.
James J. Gilstrap
Treasurer and Chief Financial
Officer
Wallace A. Patzke, Jr.
Controller and Chief Accounting
Officer
<PAGE>
FRP PROPERTIES, INC.
FORM 10-Q FOR THE QUARTER ENDED DECEMBER 31, 1999
EXHIBIT INDEX
(3)(a)(1) Articles of Incorporation of FRP Properties, Inc.
Previously filed with Form S-4 dated December 13,
1988. File No. 33-26115.
(3)(a)(2) Amendment to the Articles of Incorporation of FRP
Properties, Inc. filed with the Secretary of State of
Florida on February 19, 1991. Previously filed with
Form 10-K for the fiscal year ended September 30,
1993. file No. 33-26115.
(3)(a)(3) Amendments to the Articles of Incorporation of FRP
Properties, Inc. filed with the Secretary of State of
Florida on February 7, 1995. Previously filed as
appendix to the Company's Proxy Statement dated
December 15, 1994.
(3)(a)(4) Amendment to the Articles of Incorporation, filed with
the Florida Secretary of State on May 6, 1999. A form
of such amendment was previously filed as Exhibit 4 to
the Company's Form 8-K dated May 5, 1999. File No.
33-26115.
(3)(b)(1) Restated Bylaws of FRP Properties, Inc. adopted
December 1, 1993. Previously filed with Form 10-K for
the fiscal year ended September 30, 1993. File No.
33-26115.
(3)(b)(2) Amendment to the Bylaws of FRP Properties, Inc.
adopted August 3, 1994. Previously filed with Form
10-K for the fiscal year ended September 30, 1994.
File No. 33-26115.
(4)(a) Articles III, VII and XII of the Articles of
Incorporation of FRP Properties, Inc. Previously
filed with Form S-4 dated December 13, 1988. And
amended Article III filed with Form 10-K for the
fiscal year ended September 30, 1993. And Articles
XIII and XIV previously filed as appendix to the
Company's Proxy Statement dated December 15, 1994.
File No. 33-026115.
(4)(b) Specimen stock certificate of FRP Properties, Inc.
Previously filed with Form S-4 dated December 13,
1988. File No. 33-26115.
(4)(c) Credit Agreement dated as of November 15, 1995 among
FRP Properties, Inc.; SunTrust Bank, Central Florida,
National Association; Bank of America Illinois;
Barnett Bank of Jacksonville, N.A.; and First Union
National Bank of Florida. Previously filed with Form
10-Q for the quarter ended December 31, 1995. File
No. 33-26115.
(4)(c)(1) First Amendment dated as of September 30, 1998 to the
Credit Agreement dated as of November 15, 1995.
Previously filed with Form 10-K for the year ended
September 30, 1998. File No. 33-26115.
(4)(d) The Company and its consolidated subsidiaries have
other long-term debt agreements which do not exceed
10% of the total consolidated assets of the Company
and its subsidiaries, and the Company agrees to
furnish copies of such agreements and constituent
documents to the Commission upon request.
(4)(e) Rights Amendment, dated as May 5, 1999 between the
Company and First Union National Bank. Previously
filed as Exhibit 4 to the Company's Form 8-K dated May
5, 1999. File No. 33-26115.
(10)(a) Post Distribution Agreement, dated May 7, 1986, by and
between Florida Rock Industries, Inc. and Florida Rock
& Tank Lines, Inc. and amendments thereto dated July
1, 1987 and September 27, 1988. Previously filed with
Form S-4 dated December 13, 1988. File No. 33-26115.
(10)(b) Tax Sharing Agreement, dated May 7,1986, between
Florida Rock Industries, Inc. and Florida Rock & Tank
Lines, Inc. Previously filed with Form S-4 dated
December 13, 1988. File No. 33-26115.
(10)(c) Various leasebacks and mining royalty agreements with
Florida Rock Industries, Inc., none of which are
presently believed to be material individually, except
for the Mining Lease Agreement dated September 1,
1986, between Florida Rock Industries Inc. and Florida
Rock Properties, Inc., successor by merger to Grandin
Land, Inc. (see Exhibit (10)(e)), but all of which
maybe material in the aggregate. Previously filed
with Form S-4 dated December 13, 1988. File No. 33-26115.
(10)(d) License Agreement, dated June 30, 1986, from Florida
Rock Industries, Inc. to Florida Rock & Tank Lines,
Inc. to use "Florida Rock" in corporate names.
Previously filed with Form S-4 dated December 13,
1988. File No. 33-26115.
(10)(e) Mining Lease Agreement, dated September 1, 1986,
between Florida Rock Industries, Inc. and Florida Rock
Properties, Inc., successor by merger to Grandin Land,
Inc. Previously filed with Form S-4 dated December
13, 1988. File No. 33-26115.
(10)(f) Summary of Medical Reimbursement Plan of FRP
Properties, Inc. Previously filed with Form 10-K for
the fiscal year ended September 30, 1993. File No.
33-26115.
(10)(g) Split Dollar Agreement dated October 3, 1984, between
Edward L. Baker and Florida Rock Industries, Inc. and
assignment of such agreement, dated January 31, 1986
from Florida Rock Industries, Inc. to Florida Rock &
Tank Lines, Inc. Previously filed with Form S-4
dated December 13, 1988. File No. 33-26115.
(10)(h) Summary of Management Incentive Compensation Plans.
Previously filed with Form 10-K for the fiscal year
ended September 30, 1994. File No. 33-26115.
(10)(i) Management Security Agreements between the Company and
certain officers. Form of agreement previously filed
as Exhibit (10)(I) with Form S-4 dated December 13,
1988. File No. 33-26115.
(10)(i)(1) FRP Properties, Inc. 1989 Employee Stock Option Plan.
Previously filed with Form S-4 dated December
13, 1988. File No. 33-26115.
(10)(I)(2) FRP Properties, Inc. 1995 Stock Option Plan.
Previously filed as an appendix to the Company's Proxy
Statement dated December 15, 1994.
(11) Computation of Earnings Per Common Share.
(27) Financial Data Schedule
Exhibit (11)
FRP PROPERTIES, INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
THREE MONTHS
ENDED DECEMBER 31,
1999 1998
Net income $ 550,000 1,063,000
Common shares:
Weighted average shares
outstanding during the
period - shares used for
basic earnings per share 3,365,530 3,463,660
Shares issuable under stock
options which are poten-
tially dilutive 21,158 25,910
Shares used for diluted earnings
per share 3,386,688 3,489,570
Basic earnings per
common share $.16 .31
Diluted earnings
per common share $.16 .30
<PAGE>
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<PERIOD-START> OCT-01-1999
<PERIOD-END> DEC-31-1999
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<BONDS> 42,673
0
0
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<CGS> 16,543
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